Our brains naturally compel us to adopt the commonly held ideas of our communities…
January 2018, Nick Cassella, Excerpt from, “Why Do We Excuse the Extremes of Capitalism”
Joseph Henrich, a professor of human evolutionary biology at Harvard, argues that humans are uniquely talented at mimicking the actions and ideas of others. Our brains naturally compel us to adopt the commonly held ideas of our communities. This impulse means that we unknowingly can develop “norms, institutions, and languages” which “emerge gradually without anyone fully apprehending how or why they work.”
Nevertheless, that doesn’t stop humans from feeling really confident about our knowledge of the world, as the Dunning–Kruger effect demonstrates. And when we have people around us who hold similar views to us, well, we feel even more assured.
These psychological characteristics illustrate why it is so difficult to accurately judge one’s own society and the norms which govern it. Confined by context, people will act upon and believe rather absurd and self-defeating ideologies.
The good news is that today people are thinking more critically about capitalism and are challenging its assumptions. For example, the success of higher minimum wages across the US has tested a core free-market principle that when the price of labor goes up, jobs must go down. Yet Seattle is raising its minimum wage to $15 and the unemployment rate is near record lows. Whether or not you attribute the minimum wage’s success to the booming regional economy is a moot point — such a caveat is not included in the supply of labor principle. Could it be that this principle did not take into account the complex nature of labor itself and was instead kept alive because it served as a useful intimidation tactic to suppress wages?
Another example comes from the work of Richard Thaler. Last year, he won a Nobel Prize in Economic Sciences for showing that people are not all that rational when it comes to economics. Turns out, humans are rather clumsy decision-makers. This may seem self-evident to anyone that has interacted with others, but Thaler’s work will have a seismic effect on the discipline. It is not an exaggeration to say that “most mainstream academic assumptions and theories” in capitalism “are based on rational choice theory.” These findings call the economic order into question just as much as Martin Luther’s teachings subverted the Catholic Church.
It is exciting to witness a time when sacred belief systems of the day are called out. It is all too easy for humans to look back and condemn the foolishness of certain ideas once they themselves are removed from that time. Yet it is far more important, even imperative, to instead seek out and fight against the insidious ideas of the present.
“Progress,” it has been said, “is born of doubt and inquiry.” If that is the case, then if we want an economy that is both prosperous, but fair, innovative, yet secure — it will take all of us to question and discover whether or not the arguments perpetuating the status quo are truly convincing.
Even though our psychology compels us to do so, we cannot surrender to the lure of conformity and take “security in the false refuge of consensus.”
